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How does Tax expenses work

  • 15-05-2011 8:58pm
    #1
    Fondu
    Registered Users, Registered Users 2 Posts: 76 ✭✭


    Ok lets say i have a house earning 10k a year.
    Total income is 40k
    Total tax incl credits is 10k.

    Lets say i have 5k of expenses towards maintenance and advertising of the house.

    How is this deducted from my tax.

    On a side note,i need to make major renovations to a house so i can rent it out.This could cost upwards of 40k. Can i claim this as a expense or what do i do.

    This is all in regards to rental income.


Comments

  • #2
    Bobby1984
    Registered Users, Registered Users 2 Posts: 269 ✭✭Bobby1984


    5K expenses will be taken off income provided they are allowable so it would leave you with 5K rental profit. Depending on the type of major renovations which you are considering, you would claim capital allowances at 12.5% so the total expense of 40K would be spread over 8 years and would again be deducted from rental profit


  • #3
    Fondu
    Registered Users, Registered Users 2 Posts: 76 ✭✭Fondu


    Bobby1984 wrote: »
    5K expenses will be taken off income provided they are allowable so it would leave you with 5K rental profit. Depending on the type of major renovations which you are considering, you would claim capital allowances at 12.5% so the total expense of 40K would be spread over 8 years and would again be deducted from rental profit

    Is the 5k expense taken off total overall income or just rent income.
    So to clarify is this what you are saying.5k expenses will mean that if my work income is say 30k and rent income is 10k, i will be taxed at 30+(10-5)=35

    Is the capital expense deducted from only the house that was refurbished or can it be used for an overall rent expense

    Renovations include: subsidence(hopefully covered by insurance),extension,windows, insulation, bathroom, waterworks/pipes,furniture, gardening refuse


  • #4
    Fondu
    Registered Users, Registered Users 2 Posts: 76 ✭✭Fondu


    bump


  • #5
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    No need to bump this after two days- this isn't AH.

    Read the guide to rental income in the stickies- might have saved you two days waiting around.


  • #6
    Fondu
    Registered Users, Registered Users 2 Posts: 76 ✭✭Fondu


    Sorry for sounding stupid but i cant see a sticky for rental income + im question is in regards to all expenses,not just one..I have work related expenses that im questioning as well


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  • #7
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,686 ✭✭✭barneystinson


    Fondu wrote: »
    Sorry for sounding stupid but i cant see a sticky for rental income + im question is in regards to all expenses,not just one..I have work related expenses that im questioning as well

    Ok well for starters here's a link to the guide to rental income as published by Revenue (and it was linked in the "Revenue Briefings and Guides" sticky... http://www.revenue.ie/en/tax/it/rental-income.html

    What kind of work related expenses are you talking about? (This is the first you've mentioned of them; reading all your earlier posts suggests that you were specifically asking about rental expenses.)


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